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TransUnion's (TRU) Q3 Earnings and Revenues Beat Estimates

TransUnion TRU reported solid third-quarter 2020 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of 81 cents per share outpaced the consensus mark as well as the year-ago reported quarter’s figure by 6.6%. Total revenues of $696 million beat the consensus mark by 2.3% and improved 1% year over year on a reported basis, 2% on a constant-currency and 1% on an organic constant-currency basis.

TransUnion stated that in response to the COVID-19 pandemic, the company continues to follow the work-from-home model and is trying to be disciplined in managing investment priorities and cost structure. The company continues to benefit from re-openings, government stimulus and successful proactive efforts to support its associates, customers and consumers during this time of crisis .

TransUnion continues to invest in Global Operations, Global Solutions and Project Rise to boost growth and efficiency  in its businesses. Recently, the company completed the acquisitions of Signal in the third quarter and TruOptik early in the fourth quarter to boost its Media Vertical.

So far this year, shares of TransUnion have declined 7.6% compared with 6.9% decline of the industry it belongs to.

Let’s check out the numbers in detail.

Revenues by Segments

U.S. Market revenues of $438 million grew 4% year over year both on a reported and organic basis. Within the segment, Financial Services revenues of $249 million climbed 11% year over year on a reported and an organic basis. Emerging Vertical revenues, including Healthcare, Insurance and all other verticals, were $189 million, down 3% year over year on a reported and 4% on an organic basis.

International revenues declined 9% year over year on a reported basis and 7% on a constant-currency basis to $145 million.

Revenues from Canada increased 2% on a reported basis and 3% on a constant-currency basis to $24 million. Revenues from the United Kingdom came in at $44 million, down 7% on a reported basis and 11% on a constant-currency basis. India revenues declined 13% on a reported basis and 8% on a constant-currency basis to $24 million. Asia-Pacific revenues came in at $15 million, down 4% on a reported basis and 6% on a constant-currency basis. Revenues from Latin America decreased 18% on a reported basis and 5% on a constant-currency basis to $22 million. Africa revenues were down 22% on a reported basis and 10% on a constant-currency basis to $12 million.

Consumer Interactive segment revenues improved 3% from the prior-year-quarter figure to $132 million.

Operating Performance

Adjusted EBITDA was $270 million, down 4% year over year on a reported basis and 3% on constant-currency as well as organic constant-currency basis. Adjusted EBITDA margin came in at 38.8%, down 190 basis points.

TransUnion Price, Consensus and EPS Surprise

TransUnion price-consensus-eps-surprise-chart | TransUnion Quote

Key Balance Sheet and Cash Flow Figures

TransUnion had $554 million in cash and cash equivalents at the end of the third quarter compared with $432 million at the end of the prior quarter. Long-term debt was $3.6 billion, flat year on year.

The company generated $178.8 million in cash from operating activities and CapEx was $44.1 million. It paid out $14.3 million in dividends in the quarter.

Outlook

For the fourth quarter of 2020, revenues are anticipated between $678 million and $698 million. The Zacks Consensus Estimate of $697.98 million lies within the guided range.

Adjusted earnings are anticipated to be between 74 and 80 cents per share. The Zacks Consensus Estimate of 76 cents lies within the guided range.

Adjusted EBITDA is anticipated between $255 million and $271 million.

For 2020, the company expects revenues between $2.696 billion and $2.715 billion. The Zacks Consensus Estimate of $2.69 billion lies within the guided range.

Adjusted earnings are  anticipated between $2.94 and $3.01 per share. The Zacks Consensus Estimate of $2.93 lies below the guided range.

Adjusted EBITDA is anticipated between $1.031 billion and $1.047 billion.

Currently, TransUnion carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected third-quarter 2020 results, with adjusted earnings of $1.87 per share beating the Zacks Consensus Estimate by 16.2% and improving 26.4% on a year-over-year basis. The reported figure exceeded the guided range of $1.30-$1.40.

The Interpublic Group of Companies IPG reported better-than-expected third-quarter 2020 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 43.2% and improved 8.2% on a year-over-year basis.

IQVIA Holdings IQV reported solid third-quarter 2020 adjusted earnings per share of $1.63, which beat the consensus mark by 8% and improved 1.9% on a year-over-year basis. The reported figure was above the guided range of $1.47-$1.55.

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Equifax, Inc. (EFX): Free Stock Analysis Report
 
Interpublic Group of Companies, Inc. The (IPG): Free Stock Analysis Report
 
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IQVIA Holdings Inc. (IQV): Free Stock Analysis Report
 
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